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Ritchie Bros. shares are down again today. The company's stock has hit a speed bump in 2017, but it should still have a bright future.

What happened?

Shares of Ritchie Bros Auctioneers, Inc.(NYSE:RBA), the world's largest seller of used heavy equipment via its location and online auctions, are tumbling 9% as of 3:20 p.m. EST after the company fell short of analysts' third-quarter profit estimates.

So what

Ritchie Bros. revenue checked in at $141 million during the third quarter, a 9% increase over the prior year, topping analysts' estimates calling for $139.4 million. However, the 9% increase was largely driven by acquisitions, and on a like-for-like basis revenue was down 8.3%. Unfortunately, the top-line increase didn't filter down to the bottom line, as the heavy equipment auctioneer's adjusted profit of $0.09 per share fell short of analysts' estimates calling for $0.14 per share.

Said Ravi Saligram, CEO of Ritchie Bros., in a press release:

Our third quarter revenues declined on a like-for-like basis versus prior year, which is primarily related to the significant equipment supply shortage especially in the U.S., as dealers and end users continue to experience high equipment utilization rates. We faced a tough comparable quarter due to the massive Columbus auction last year as well as growing pains of sales force integration and execution, as our legacy RB and IP teams learn to sell each others' offerings.

Image source: Ritchie Bros. Auctioneers.

Now what

The kind of speed bump Ritchie Bros. hit in 2017 hasn't been uncommon for the stock over the past two decades.

Despite missing earnings estimates, management is capable of righting the ship and believes the combination of Ritchie Bros. and Iron Planet will deliver growth going forward as the two former competitors develop synergies, expand business internationally, and cross-sell more of the company's products and services.

Daniel Miller has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

Author

As a Motley Fool Industrial Specialist, I use my marketing and business background in the automotive industry to evaluate major automakers and other large industrial corporations. Follow me on twitter for tweets about stocks, cars, sports, and anything I find amusing.
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